Samsung pushed to No 3 slot in premium phones, loses out to Apple & OnePlus

The fight for the top spot in the high-end segment – Rs 30,000 and above – is set to heat up further in November with players like Google, Xiaomi and Nokia in the fray.Gulveen Aulakh | ET Bureau | October 31, 2017, 07:46 IST

NEW DELHI: After rapidly losing ground to Xiaomi in the overall smartphone rankings, market leader Samsung has lost not just its top spot in the premium segment to Apple in the July-September period, but has been relegated – for the first time ever – to No 3 behind OnePlus in a segment that is seeing competition like never before. Samsung, however, disputed the findings of Counterpoint Research and said it continued to lead the segment by end-sales.

The fight for the top spot in the highend segment – Rs 30,000 and above – is set to heat up further in November with players like Google, Xiaomi and Nokia in the fray, making life for Apple and Samsung – which have historically dominated this segment – far tougher. Sector watchers expect these brands to offer discounts or bundled offers in this segment to get buyers amid the heightened competition. Apple, for example, is believed to be tying up with Airtel to sell its super premium product on the telco's recently launched online store.

“Samsung’s share dropped to 31% from 55% in the previous quarter as premium segment (above Rs 30,000) was driven more by Rs 30,000-40,000 band due to OnePlus and older iPhone models, due to which majority of the volume of the segment was skewed towards Rs 30,000-40,000 subsegment where Samsung is not that strong,” said Tarun Pathak, senior analyst at Counterpoint Research.

Apple led with 35% share in July-September, on the back of iPhone 8, and price cuts on earlier models right after GST. OnePlus followed Apple with 32% backed by sales of OnePlus 5, as per data from the Hong-Kong based firm.

“Samsung is going to find it tough to get back in terms of volumes, as the price gap between its flagships and those of competitors like Xiaomi and OnePlus, is quite large in premium segment,” Pathak added. Some analysts said Samsung may cut prices or bring out some offers on the Note 8 to claw back share.

Samsung disputed the agency data saying that the share of phones sold in the market was highest amongst competition. The company's market share by volume was 65.2% and 65.4% by value, in the above Rs 30,000 segment, Samsung India’s senior vice president for mobile business Asim Warsi said, citing data from German research firm GfK which tracks sales to end-consumers.

Analysts said volume of shipments in the premium segment is expected to be higher than usual for the current October-December quarter, while competition will be higher than ever before. Retail sales of Apple’s highest priced iPhone X – from Rs 89,000 to Rs 1lakh – begin on November 3, while Google’s Pixel 2 series, between Rs 61,000 and Rs 82,000, begins selling from November 15.

The entry of Xiaomi, which sold over 4 million phones in a month, into the premium segment with Mi Mix 2 priced around Rs 36,000 and growing popularity of Nokia 8 launched in September at around Rs 37,000 will also add to the mix of options for consumers, besides Samsung’s Galaxy Note 8 and OnePlus that has OnePlus 5 at Rs 33,000, in the market since June. “There will be increased competition in the premium segment, with a much larger number of players than typical Apple-Samsung, with Xiaomi, Google and others coming in,” said Jaipal Singh, senior analyst at IDC India.

He added that the shipments in November are likely to be significantly higher from same period last year. Usually shipments, including in this segment, see a dip immediately after Diwali.

Analysts add that while Xiaomi and Google can make a dent in the segment, as both have devices priced at lower than competition, Apple will want to keep its lead in the present quarter with iPhone X, which has seen strong demand. Apple though is facing huge supply issues for the super-premium device.

“Demand of iPhone X is very high but hardly any supplies. Each shop has been given 2-3 units, they have been asked not to take a lot of bookings,” said an executive in the trade channel aware of offline strategy, asking not to be named. IDC’s Singh said consumers may well shift to iPhone 8 and iPhone 8 Plus due to inadequate supplies of higher priced model.